E9 Shark-32 Pattern Strategy The E9 Shark-32 Pattern is a powerful trading tool designed to capitalize on the Shark-32 pattern—a specific Candlestick pattern.
The Shark-32 Pattern: What Is It?
The Shark-32 pattern is a technical formation that occurs when the following conditions are met:
Higher Highs and Lower Lows: The low of two bars ago is lower than the previous bar, and the previous bar's low is lower than the current bar. At the same time, the high of two bars ago is higher than the previous bar, and the previous bar’s high is higher than the current bar.
This unique setup forms the "Shark-32" pattern, which signals potential volume squeezes and trend changes in the market.
How Does the Strategy Work?
The E9 Shark-32 Pattern Strategy builds upon this pattern by defining clear entry and exit rules based on the pattern's confirmation. Here's a breakdown of how the strategy operates:
1. Identifying the Shark-32 Pattern
When the Shark-32 pattern is confirmed, the strategy "locks" the high and low prices from the initial bar of the pattern. These locked prices serve as key levels for future trade entries and exits.
2. Entry Conditions
The strategy waits for the price to cross the pattern's locked high or low, signaling potential market direction.
Long Entry: A long trade is triggered when the closing price crosses above the locked pattern high (green line).
Short Entry: A short trade is triggered when the closing price crosses below the locked pattern low (red line).
The strategy ensures that only one trade is taken for each Shark-32 pattern, preventing overtrading and allowing traders to focus on high-probability setups.
3. Stop Loss and Take Profit Levels
The strategy has built-in risk management through stop-loss and take-profit levels, which are visually represented by the lines on the chart:
Stop Loss:
Stop loss can be adjusted in settings.
Take Profit:
For long trades: The take-profit target is set at the upper white dotted line, which is projected above the pattern high.
For short trades: The take-profit target is set at the lower white dotted line, which is projected below the pattern low.
These clearly defined levels help traders to manage risk effectively while maximizing potential returns.
4. Visual Cues
To make trading decisions even easier, the strategy provides helpful visual cues:
Green Line (Pattern High): This line represents the high of the Shark-32 pattern and serves as a resistance level and short entry signal.
Red Line (Pattern Low): This line represents the low of the Shark-32 pattern and serves as a support level and long entry signal.
White Dotted Lines: These lines represent potential profit targets, projected both above and below the pattern. They help traders define where the market might go next.
Additionally, the strategy highlights the pattern formation with color-coded bars and background shading to draw attention to the Shark-32 pattern when it is confirmed. This adds a layer of visual confirmation, making it easier to spot opportunities in real-time.
5. No Repeated Trades
An important aspect of the strategy is that once a trade is taken (either long or short), no additional trades are executed until a new Shark-32 pattern is identified. This ensures that only valid and confirmed setups are acted upon.
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E9 ASIA Session
*note: Upon updating the script the conversion from V4 to v5 has lost the weekend extended lines and now prints an asia session for each day. It is recommended (esp for crypto) to extend these lines across the weekend like in the chart example above.
The E9 Asia Session Indicator is a valuable tool for traders aiming to track and analyze the Asia trading session on financial charts. This indicator provides insights into price behavior during the Asia session, which is crucial for making informed trading decisions. Here's an overview of its key functionalities and uses:
1. Session Highs and Lows
Purpose:
The indicator calculates and plots the high and low of the Asia session.
It helps identify key levels of support and resistance established during this trading period.
Importance:
These levels can act as significant reference points for future price movements.
Price action that occurs near these levels often provides clues about potential breakouts or reversals.
2. Session Background Color
Purpose:
The indicator can shade the background of the chart during the Asia session.
Importance:
This visual cue helps quickly identify the session's timeframe, enhancing the trader’s ability to observe price behavior within this specific period.
It aids in distinguishing between different trading sessions and understanding their influence on price action.
3. Start of Session Marker
Purpose:
A visual marker (such as a circle) is plotted at the beginning of each Asia session.
Importance:
This marker helps traders visually pinpoint the start of the session, making it easier to analyze how the price reacts from the session's opening.
4. End of Session Marker
Purpose:
A marker is plotted at the end of the Asia session, indicating where the session closes.
Importance:
This marker is useful for tracking the end of the session and observing price behavior around this critical juncture.
It helps in analyzing whether the session's high or low gets revisited or broken in subsequent sessions.
Practical Uses:
Strategic Planning: Traders can use the plotted high and low levels to set their trading strategies, stop-loss orders, and profit targets.
Market Analysis: Understanding how price interacts with the Asia session’s high and low levels can provide insights into market sentiment and potential price movements.
By incorporating the E9 Asia Session Indicator into your trading toolkit, you can gain a deeper understanding of the Asia session's impact on price dynamics, enhancing your overall trading strategy and decision-making process.
Disclaimer: The information contained in this article does not constitute financial advice or a solicitation to buy or sell any securities. All investments involve risk, and past performance does not guarantee future results. Always evaluate your financial circumstances and investment objectives before making trading decisions.
E9 MACD
The E9 MACD (Moving Average Convergence Divergence) indicator is a powerful tool used in technical analysis to help traders identify potential buy and sell signals based on price action. It is designed to provide clear visual cues and alerts for trading decisions. Here’s how it applies to price action and its key functionalities:
Key Features and Functionality
MACD Line and Signal Line:
MACD Line: Represents the difference between a fast and a slow moving average of the price. It helps in identifying the momentum of the price movement.
Signal Line: A smoothed average of the MACD Line, used to generate trading signals when the MACD Line crosses above or below it.
Histogram: The histogram shows the difference between the MACD Line and the Signal Line. It visually represents the strength of the trend, with positive values indicating bullish momentum and negative values indicating bearish momentum.
Trend Coloring:
Uptrend: When the MACD Line is above the Signal Line, the bars can be colored green to indicate a potential buying opportunity.
Downtrend: When the MACD Line is below the Signal Line, the bars can be colored red to signal a potential selling opportunity.
Timeframe Flexibility:
The E9 MACD can be adjusted to different timeframes, allowing traders to analyze short-term or long-term trends based on their trading strategy. This flexibility helps in tailoring the indicator’s analysis to different market conditions.
Visual Alerts and Highlights:
The indicator includes options to highlight price bars and background colors when significant crossovers occur, making it easier to spot key trading signals.
Circles can be plotted on the MACD Line to indicate cross events, enhancing visual clarity.
Customizable Appearance:
Traders can customize the appearance of the MACD Line, Signal Line, and Histogram, including color and line width, to suit their personal preferences and improve readability.
Alerts for Trading Signals:
The E9 MACD can generate alerts for crossovers of the MACD Line and Signal Line, helping traders stay informed of potential trading opportunities even when they are not actively monitoring the charts.
Application in Trading
The E9 MACD is particularly useful for:
Identifying potential entry and exit points based on the crossing of the MACD Line and Signal Line.
Gauging the strength of the current trend through the histogram.
Adjusting to different timeframes to align the indicator with various trading strategies, from day trading to long-term investing.
By providing clear visual indicators and alerts, the E9 MACD helps traders make more informed decisions and better understand the momentum and direction of price movements.
E9 Shark-32 PatternUnderstanding the Shark-32 Pattern and its Trading Applications
The Shark-32 Pattern is a bearish technical trading formation used to predict market reversals or trend continuations. It highlights a downward move followed by a corrective rally, signaling a potential resumption of the downtrend. Here’s a breakdown of how it works:
What is the Shark-32 Pattern?
The Shark-32 pattern is a five-wave structure typically observed in bearish markets:
Wave 0 to X: A significant price decline starts the pattern.
Wave X to A: A correction pushes the price slightly upward.
Wave A to B: The price drops again but doesn’t reach the initial low.
Wave B to C: A final sharp decline concludes the pattern.
Once Wave C is formed, it suggests that the market will continue to move downward, presenting a potential selling or shorting opportunity.
Using the Pattern in Trading
This pattern is valuable for traders seeking high-probability bearish setups. The goal is to capitalize on the continuation of a downtrend following the corrective rally (X to A). Identifying the Shark-32 pattern helps anticipate the next wave of selling pressure.
Trading Setup
Identify a Shark-32 pattern.
If the price closes above the pattern's high, buy at the open the next day.
If the price closes below the pattern's low, short at the open the next day.
Sell/cover when the price moves 7% in the direction of the breakout.
Close the trade for a loss if the price moves 7% in the opposite direction.
For example, in a bull market after an upward breakout from a Shark-32, the net gain was $69.55. The method won 56% of the time with 5,218 winning trades and an average gain of $714.07. Conversely, 44% of trades were losers, with an average loss of $747.33. The average holding period was 26 calendar days.
The gains and losses were closely aligned with the 7% threshold set for this test.
Key Target Levels
To enhance the strategy, use dotted projection lines as target levels:
Upper Target: Drawn above the high of the corrective rally (Wave A). If the price breaks above this line, it may signal further upward movement, indicating a potentially weaker downtrend.
Lower Target: Positioned below the low of Wave C, providing a target for bearish trades.
These lines help determine future price targets and assist in setting take-profit or stop-loss levels.
Trading the Breakout
Look for breakouts once the Shark-32 pattern is identified:
Upward Breakout: If the price closes above the green line (high from two bars ago), it indicates a potential reversal to the upside.
Downward Breakout: If the price breaks below the red line (low from two bars ago), it confirms the bearish continuation.
Breakouts allow traders to adjust their positions based on market shifts.
Trading Tips
Continuation: The Shark-32 pattern acts as a continuation 60% of the time, confirming the ongoing trend.
Breakout Confirmation: Wait for the price to close above or below the pattern’s key levels before entering a trade.
Trade with the Trend: Since the Shark-32 is a continuation pattern, expect the breakout to align with the inbound price trend.
Symmetry: Patterns with symmetry often perform better. For more insights, refer to detailed trading literature.
Half-Staff: The Shark-32 can form midway in a trend, similar to flags and pennants.
Shark-32: Trading Performance
Based on an analysis of 23,369 trades, the following performance metrics were observed:
Bull Market with Upward Breakout: The average net profit was $69.55. This method won 56% of the time, with winning trades averaging $714.07. Losing trades, which constituted 44% of the total, had an average loss of $747.33. The average holding period was 26 calendar days.
Bull Market with Downward Breakout: The average net loss was $(76.36). This method won 43% of the time, with winning trades averaging $753.56. Losing trades, which constituted 57% of the total, had an average loss of $706.32. The average holding period was 23 calendar days.
Bear Market with Upward Breakout: The average net loss was $(89.13). This method won 46% of the time, with winning trades averaging $710.77. Losing trades, which constituted 54% of the total, had an average loss of $756.97. The average holding period was 16 calendar days.
Bear Market with Downward Breakout: The average net profit was $65.17. This method won 52% of the time, with winning trades averaging $781.62. Losing trades, which constituted 48% of the total, had an average loss of $722.41. The average holding period was 13 calendar days.
